Researchers warn of big increase in economic costs if cuts in greenhouse gas emissions are delayed

Stronger efforts to cut emissions of greenhouse gases should be undertaken if global warming of more than 1.5 Celsius degrees is to be avoided without relying on potentially more expensive or risky technologies to remove carbon dioxide from the atmosphere or reduce the amount of sunlight reaching the Earth’s surface, a comprehensive new analysis has concluded today (27 September 2018).

A paper on ‘The Economics of 1.5˚C Climate Change’, published in the journal ‘Annual Review of Environment and Resources’, warns that the target of limiting global warming to 1.5 Celsius degrees could soon become too economically expensive to justify, despite the benefits it could provide.

The authors from the London School of Economics and Political Science, Imperial College London and the University of East Anglia assessed almost 200 published academic papers on climate change, including recent studies about the economics of limiting global warming to 1.5 Celsius degrees.

They noted that economics analyses produce inconclusive results about the value of limiting global warming to 1.5 Celsius degrees.

The paper states: “Due to large uncertainties about the economic costs and, in particular, the benefits, there can be no clear answer to the question of whether the 1.5˚C target passes a cost-benefit test”.

Nonetheless, it draws attention to large benefits of limiting global warming to 1.5 Celsius degrees instead of 2 Celsius degrees: “There is evidence to suggest that limiting warming to 1.5˚C reduces the risk of crossing climate tipping points, such as melting of the Greenland and Antarctic ice sheets, but the reduction in risk cannot presently be quantified.”

Professor Simon Dietz of the ESRC Centre for Climate Change Economics and Policy and the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science, who is the lead author on the paper, said: “The evidence we have simply does not give us a clear answer on whether the benefits of limiting warming to 1.5 Celsius degrees exceed the costs. But if we want to keep the option open to limit warming to 1.5 Celsius degrees, then unless we discover a much cheaper way to remove carbon dioxide from the air, and if we want to avoid risky methods of blocking out sunlight, we have to pursue the goal of 1.5 Celsius degrees now.”

Another co-author of the paper, Professor Rachel Warren of the University of East Anglia, said: “Our review of recent studies shows the significant projected benefits of limiting global warming to 1.5 Celsius degrees rather than 2 Celsius degrees above pre-industrial levels for both human and natural systems. These benefits include preservation of Arctic sea ice, reduced biodiversity loss, and reduced damage to coral reefs.”

The paper acknowledges the larger financial investments required to cut emissions sufficiently to limit global warming to 1.5 Celsius degrees instead of 2 Celsius degrees, particularly if policies are not designed well. It states:

“The remaining carbon budget consistent with 1.5˚C is very small and the global economy would need to be decarbonized at an unprecedented scale to stay within it, likely entailing larger costs.

Carbon dioxide removal could be achieved, for example, by planting more vegetation, by burning plants and trees to generate energy and capturing and storing the resulting emissions of carbon dioxide, or by directly capturing carbon dioxide from the atmosphere and storing it. These methods of carbon dioxide removal tend to be costly and some present challenges for agriculture, sustainability and biodiversity.

Solar radiation management could involve, for instance, reducing the amount of the Sun’s energy that reaches the Earth by injecting aerosol particles into the atmosphere to block out some sunlight, in order to counteract the warming caused by rising levels of greenhouse gases. This is largely untested and has significant associated risks.

Another co-author of the paper, Dr Ajay Gambhir of the Grantham Institute – Climate Change and the Environment at Imperial College London, said: “The comparative benefits of keeping global warming below 1.5 Celsius degrees, compared to 2 Celsius degrees, are striking. So even though it will be significantly more challenging to achieve the lower temperature goal, in terms of the required investments, strength of policy and greater reliance on measures such as carbon dioxide removal, we must not close the door on it. This means we need to step up the immediacy and pace of action.”

The paper draws attention to studies showing that the carbon price consistent with limiting global warming to 1.5 Celsius degrees would be more than US$100 per tonne of carbon-dioxide-equivalent by 2020, and about three times higher than the price required to stop warming of more than 2 Celsius degrees.

This study is launched ahead of the planned publication by the Intergovernmental Panel on Climate Change in October 2018 of a special report on global warming of 1.5 Celsius degrees.

National governments are currently carrying out a collective stocktake, named the Talanoa Dialogue, of their contributions to the implementation of the Paris Agreement on climate change, which includes a commitment to “[h]olding the increase in the global average temperature to well below 2˚C above preindustrial levels and pursuing efforts to limit the temperature increase to 1.5˚C above preindustrial levels”.

For more information about this media release or to obtain an embargoed copy of ‘The Economics of 1.5˚C Climate Change’ by Simon Dietz, Alex Bowen, Baran Doda, Ajay Gambhir and Rachel Warren, please contact Bob Ward on +44 (0) 7811 320346 or r.e.ward@lse.ac.uk

The ESRC Centre for Climate Change Economics and Policy (http://www.cccep.ac.uk/) is hosted by the University of Leeds and the London School of Economics and Political Science. It is funded by the UK Economic and Social Research Council (http://www.esrc.ac.uk/). The Centre’s mission is to advance public and private action on climate change through rigorous, innovative research.

In 2007, the Grantham Foundation for the Protection of the Environment made the visionary decision to support an Institute at Imperial College London to provide a vital global centre of excellence for research and education on climate change. Ten years on, the Grantham Institute is established as an authority on climate and environmental science. The Grantham Institute is Imperial’s hub for climate change and the environment, and one of six Global Institutes established to promote inter-disciplinary working and to meet some of the greatest challenges faced by society. We drive forward discovery, convert innovations into applications, train future leaders and communicate academic knowledge to businesses, industry and policymakers to help shape their decisions. Imperial College London is a global university with a world-class reputation in science, engineering, business and medicine, and excellence in teaching and research. Consistently rated amongst the world’s best universities, Imperial is committed to developing the next generation of researchers, innovators and leaders through collaboration across disciplines.

The University of East Anglia (UEA) is a UK top 15 university. Known for its world-leading research and outstanding student experience, it was awarded Gold in the Teaching Excellence Framework. UEA is a leading member of Norwich Research Park, one of Europe’s biggest concentrations of researchers in the fields of environment, health and plant science. http://www.uea.ac.uk